Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 11 - Part IV - Public Goods and Common Resources - Quick Check Multiple Choice: 6

Answer

C. Overused in the absence of government

Work Step by Step

Common resources are overused in the absence of government. Common resources are rival and non-excludable. Meaning there is a limited amount of a good and no one is restricting the access of the good. Without government putting regulations on the resources people will take advantage of the common resource. This is exactly what happened in the early 1900s with the buffalo population. There were no regulations so hunters would kill the animal until the population fell to about 400. The government stepped in at this point to help restore the buffalo population.
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